Jane Ambachtsheer, Global Head of Sustainability at BNP Paribas Asset Management talks to Lynn Strongin Dodds about ESG, strategy and transformation.
The focus on environmental, social and governance investing has grown sharper since the pandemic started as ESG-focused corporates have outshone their traditional peers. The robust returns did not come as a surprise though to Jane Ambachtsheer, Global Head of Sustainability at BNP Paribas Asset Management (BNPP AM). It has been part and parcel of her daily working and personal life for over 20 years.
In fact, during her tenure as a partner and chair of Mercer’s responsible investment team, the consultancy published a report, Shedding Light on Responsible Investment: Approaches, Returns and Impacts, which showed the majority of the 16 academic studies analysed, generated a positive relationship between ESG factors and companies’ financial performance.
Canadian born Ambachtsheer started at Mercer in 2000 as an investment consultant but was fortunate enough to work with another visionary – Tim Gardener (who died in 2019 and was global leader of Mercer investment consulting) – who fully supported her pitch of a new responsible investing unit to the global team.
“I started at Mercer doing traditional investment analysis,” she says, “However, I was very lucky in having a mentor, colleague and friend in Tim as I realised early on in my career that responsible investing was not just my passion but that it was going to be a major trend in the future. It was early days, but Tim was ahead of others and instrumental in helping to develop our ESG advisory services and manager assessments.”
By the time Ambachtsheer left Mercer, she was responsible for overseeing the group’s strategy, developing intellectual capital across a range of responsible investment topics, and advising investors in Europe and North America.
However, she also took time out to act as a consultant to the United Nations when it set up the Principles for Responsible Investment (PRI) in 2006. The project now has 2,701 signatories representing $103.4tn in assets. She is also a trustee of CDP, a member of the FSB Task Force on Climate-related Financial Disclosures, and a member of the PRI Academic Working Group.
Ambachtsheer first met Gardner though when she was learning the pension ropes at her Dutch born father’s pension fund benchmarking firm CEM in Toronto. Her job was researching different aspects such as asset allocation, returns and costs of hundreds of pension funds and to process it in their databases. In 1997, she moved to Amsterdam to help open the Dutch CEM branch and also to obtain a masters degree in social science at University of Amsterdam.
“Research in the pre-Google days was different, but I had the right training studying economics and literature at University,” she says. “It was a great learning experience about how the investment industry worked, capital markets in different countries and the connections between pension funds and the bottom line." When I was 23, I moved to the Netherlands to help establish the Dutch CEM office and I then pursued a masters degree where I learned about the international refugee movement and international development. I had been living in a Canadian bubble and this really broadened my perspective as I met people from different parts of the world who also had different experiences.”
The academic qualifications combined with her work at CEM and Mercer proved to be the right training ground for her current role at BNP Paribas. Although the French asset manager was an established figure in the sustainable world, it had not permeated throughout the entire organisation. “After spending a great 18 years at Mercer building the responsible investment business in London, Toronto and Paris, I was ready for a new challenge when I got the call from BNPP AM about the job,” she says. “The opportunity involved transforming the asset manager to a fully sustainable firm. There was already strong leadership at the top, but it had not fully trickled down across all business lines.”
Traditionally, as Ambachtsheer points out, the day-to-day work of managing money has often been separated from sustainable investing. Today BNPP AM has a much more integrated approach thanks to her work at linking sustainability with the rest of the organisation. “One of the key things we wanted to do was to transform the way people think strategically about sustainability,” she says. “Our aim was to focus minds and to develop a proprietary framework. We wanted to measure and report on a wide range of strategies against different benchmarks based on sustainability integration.”
The culmination of their efforts was the launch of the Global Sustainability Strategy, which incorporates sustainability considerations across all of its investments, covering all asset classes and geographies. It was divided into four pillars, the first centring on ESG integration which is a process guided by formal ESG Integration Guidelines and overseen by an ESG Validation Committee. Stewardship is also an important plank as it puts pressure on corporates to accept best practice through proxy voting and engagement but also ensuring that it is investing in companies that show responsible business conduct.
Next on the list is the use of the UN Global Compact principles to set out the conditions for investing in particular sectors, and guide for screening requirements and engagement. For example, it will exclude companies engaged in mining thermal coal and generating electricity from coal. The fourth section is forward looking and focuses on the so called three Es or key issues underpinning long-term economic performance. These include energy transition, environmental sustainability, and equality and inclusive growth.
Of course, devising an ambitious strategy is one thing but executing a plan is another. In order to successfully implement BNPP AM’s Global Sustainability Strategy, Ambachtsheer helped lead a firm-wide ‘sustainable transformation’ programme, which had 15 work streams at its height. The task was to embed sustainability and ESG across all operations, including all investment strategies and research, engagement activities, product development and training.
Driving the momentum also required additional expertise. Ambachtsheer not only tripled the size of the team to 25 but also appointed more than 130 “ESG champions" across investment teams and the global client group. “We wanted to give each team a key point of contact for any questions, updates, resources or information," she adds, "We also provide formal ESG training for champions and use the network as a way to broaden expertise throughout the firm.”
Ambachtsheer also exerts influence as a member of the investment committee. As the first woman to have a seat at this table, she has worked with the committee to finalise the firm's sustainable investment philosophy, Sustainable Investment Beliefs (which are included in the Global Sustainability Strategy), and ESG Integration Guidelines.
While she may be the first woman on the investment committee, Ambachtsheer has not been alone in the upper echelons of management in the ESG space and has not encountered any barriers in her career. However, she believes more progress can be made in the industry in general.
“There are more senior women in sustainable finance, but in general there is a gender imbalance and unconscious bias in financial services,” she says. “In order to have change, it needs to be intentional and not just talked about. This why we why we have made gender diversity a central pillar of our strategy and approach to corporate social responsibility. There is a lot of talk about the changes Covid will bring but I am hoping that the transition to a more flexible working environment will shine a brighter light on gender equality and help progress women to senior positions across the board.”
©Markets Media Europe 2021